Renters facing price rises as landlords sell-up and cash in on property
RENTERS face being slapped with price rises as hundreds of thousands landlords plan to sell their properties, according to landlord associations.
More than one in four landlords are considering selling up over the next year, a study by the Residential Landlords Association (RLA) has found.
The RLA says that tenants face less choice and higher rents if landlords sell up, while buying a property will be a distant dream for many renters.
There are currently 1.5 million private landlords across the UK, while there are roughly 4.7 million private renter households.
The Royal Institution of Chartered Surveyors has previously also warned that the imbalance between supply and demand could see rents increase by 15 per cent over the next five years.
Landlords' wish to sell comes after the government starting cutting down on tax breaks, such as buy-to-let mortgage relief and increased stamp duty on second homes.
Your rights if your landlord wants to sell the property
YOUR landlord can't just kick you out even if they want to sell their property – here are your rights.
If your landlord wants to sell the property you live in, you still have a right to remain in the property for the entire fixed period.
The landlord can use eviction procedures to get you to leave earlier, but if that's the case, you should check if the eviction notice is valid.
They can terminate a contract early in the following ways, according to The Tenants Voice:
- Serving a section 21 eviction notice
- Serving a section 8 notice (if they want to sell or move in) but only if you've breached the tenancy agreement, for example if you haven't paid the rent on time
- Obtaining a possession from the court and have bailiffs enforce it
- Using a special "break clause" in the tenancy agreement that allows them to end the contract early
- Ending the tenancy on your agreement
If the landlord hasn't protected your deposit properly or provided a gas safety certificate, then you can't be evicted under the Section 21 "no fault" process, said Generation Rent.
If you think the eviction isn't valid, you should seek legal advice. You can find more tips on how to challenge your eviction on Citizens Advice.
Last month, the government also announced it plans to scrap Section 21 notices, meaning 11 million renters will be saved from "no fault" evictions.
As it stands, landlords can issue a Section 21 notice without a valid reason to tenants giving them just eight weeks notice to find a new home.
Chris Norris, director of policy and practice at the National Landlords Association (NLA), told The Sun: "Landlords are losing confidence in their lettings businesses as the government continues to increase the number of regulations with which landlords must comply.
"This has resulted in increasing costs and made it harder for good landlords to stay in business.
"Those who ignore these regulations are able to profit, but only at the expense of their tenants who do not receive the protection of renting from a legitimate landlord.
"If this trend continues, tenants will have few options about the properties they are able to access and may face the unenviable choice between higher rents and risky criminal landlords."
Meanwhile, large increases in property prices over the past ten years are also giving landlords a reason to sell.
New research by estate agent Hamptons has found that the average landlord selling property in England and Wales last year made almost £80,000 more than they paid for their property, before tax, almost a decade earlier.
The figure varied wildly across the country though, with the average landlord in London making a gain of nearly £250,000 and those in the North East making the least at just under £12,000.
Yet a couple of property experts The Sun has spoken to don't believe rents will rise due to landlords selling their properties.
Independent property expert Henry Pryor said: "Time and again we have heard cries from landlords and letting agents that such-and-such a change will result in higher rents but the sky has never fallen in.
"Rents are currently rising at about 2 per cent a year almost exactly the same amount as inflation.
"By and large I don’t think that tenants will be able to absorb a significant increase even if this was proposed.
"Of course landlords are quite at liberty to warn of the unforeseen consequences of policies that are often introduced as a quick political fix but they are in danger of being accused of crying wolf if they do so whenever a new policy is announced especially if the warning fails to come to pass."
Meanwhile, Dan Wilson Craw, director of Generation Rent, said: "When a landlord sells a property, he’s not reducing the supply of homes – either another landlord buys it and rents it out, or an owner-occupier moves in, freeing up housing elsewhere.
"Either way, supply and demand are unchanged, so we wouldn’t expect an impact on rents."
Renters could struggle to find homes as landlords vow to sell up up if Section 21 no fault evictions are scrapped.
This comes weeks ahead of the ban on unfair letting fees from estate agents and landlords as well as a cap on tenancy deposits to five-weeks rent.
But some experts warn that the ban could see rents increase by up to £100 a month as agents plan to push costs onto landlords to plug a £200million gap in the industry.
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